Restraining order filed against Mass. mortgage company

Nick Rees Dec. 16, 2008, 9:49am

Martha Coakley (D)

SALEM, Mass. (Legal Newsline) -- A temporary restraining order has been obtained by the Massachusetts attorney general against a mortgage broker who represented himself as an attorney and bankruptcy expert who could save homes from foreclosure.

The temporary restraining order prohibits Metheun, Mass.-based David Coleman from doing business as Mortgage Finders of New England, and his employees from contacting individuals to offer foreclosure related services or assisting individuals in filing for bankruptcy.

The attorney general's office is also seeking a permanent injunction against Coleman, restitution for consumers, civil penalties and attorney's fees.

"Due to the bad advice Mr. Coleman allegedly gave these consumers, the foreclosures on their homes could still proceed despite the fact that the homeowners paid hundreds of dollars to Coleman for services that they thought would allow them to avoid foreclosure and save their homes," said Attorney General Martha Coakley. "This case is just one example of why the regulations we put into place last year to regulate foreclosure-related services were needed."

Coleman is alleged to have targeted vulnerable homeowners facing foreclosure by searching newspapers for contact information in foreclosure notices. Unsolicited calls would then be made to the homeowners and Coleman would offer to save the homes from foreclosure by assisting in filing for bankruptcy. Coleman charged a $1,000 upfront cash fee for his services.

Coleman does not hold a license to practice law in Massachusetts or any other state but represented himself as a bankruptcy expert an attorney. He would offer unauthorized legal advice and assistance in the filing of bankruptcy petitions. He would then decide which chapter of the U.S. Bankruptcy Code to file for bankruptcy and allegedly filled out the petitions without consulting the homeowners.

Many of the petitions were dismissed for being deficient, incomplete or lacking in proper information. When homeowners would attempt to contact Coleman over the deficiencies, he was unreachable or would ignore the consumers' concerns.

A preliminary injunction hearing is scheduled in Essex Superior Court for today.

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